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Serbia to diversify exports and advance towards inclusive post-COVID-19 development with help of UNECE recommendations

View of Belgrade, Serbia

Serbia is undergoing extensive reforms to consolidate a competitive market-based economy. The Government considers trade, along with investment, as an essential element to achieving structural transformation and inclusive growth. Reforms accord priority to harmonizing non-tariff measures.

As part of these efforts, the Government of Serbia will use UNECE recommendations to remove regulatory and procedural barriers to trade in goods, which, by inflating transaction costs, have been undermining end-to-end supply chain efficiencies, employment generation and competitiveness in domestic and global markets.

The recommendations were developed in consultation with the Government drawing on the findings of a UNECE study “Regulatory and Procedural Barriers to Trade: Needs Assessment” and “The Impact of COVID-19 on Trade and Structural Transformation in Serbia: Evidence from UNECE’s survey of Micro, Small and Medium Enterprises”, which were presented today in Geneva.

UNECE Executive Secretary Ms. Olga Algayerova emphasized that “UNECE’s studies on regulatory and procedural barriers to trade and COVID-19 impact assessments have proved to be an effective tool for member States to identify bottlenecks in their trade flows, which also affect the movement of essential goods. UNECE is committed to supporting the efforts of Serbia to harness trade as a driver for the sustainable economic recovery needed to meet the Sustainable Development Goals.”

Trade as an engine for driving inclusive development

Driving Serbia’s reforms is a trade-led development approach, which is consistent with the multilateral trading system, even though Serbia is not yet a member of the World Trade Organisation (WTO) and is anchored in bilateral and regional cooperation arrangements.

Serbia’s trade-led development efforts entered a new phase in 2010, which marked the entry into force of the Interim Agreement on Trade and Trade-Related with the European Community. The agreement, which is an integral part of the Stabilization and Association Agreement (SAA) with the European Union (EU) that entered into force in 2013, sets the context for developing a free trade area between Serbia and the EU and provides an impetus for scaling up Serbia’s reform and development efforts.

Serbia is a service-driven economy, the sector generating more than 50 per cent of GDP and providing jobs to some 70 per cent of the labour force (2019). The industrial sector ranks second, with 20 per cent of gross domestic product (GDP) and 25 per cent of total employment in 2019, followed by agriculture and construction.

The Government is taking steps to address challenges linked to its trade deficit (USD 6.7 billion in 2020); limited range of trading partners; and the weak productive capacity of micro, small and medium enterprises (MSMEs), which account for 99 per cent of active registered enterprises. MSMEs are mainly involved in activities with low value-added, and only a small segment is engaged in export activities on a continuous basis.

Structural reforms over the past years coupled with the Government’s relief and support measures to alleviate the economic impact of the Covid-19 pandemic are showing results. Real GDP grew by 1.7 per cent during the first quarter of 2021 in relation to the corresponding quarter in 2020, and the central bank estimates that growth will reach 6 per cent in 2021. However, unemployment seems to be lagging, estimated at 9.9 per cent by the end of the fourth quarter of 2021. Moreover, despite improvements, inequalities remain a challenge, with 23.2 per cent of the population found to be at risk of poverty in 2019.

Actions to support the achievement of SDGs

UNECE recommendations build on reform achievements to date and are geared to generating efficiency gains throughout the supply chain and supporting enterprise development. They involve practical, action-oriented measures that address the country’s immediate and long-term capacity needs drawing on international best practices and UNECE best practice recommendations, standards and guidelines in the areas of trade facilitation and regulatory cooperation as well as successful experiences in enterprise development.

The recommendations are grouped under 6 areas with a view to:

  • Addressing the MSMEs’ financial crisis by expanding the scope of emergency credit schemes to address the MSMEs’ liquidity crunch and publishing detailed information on application procedures.
  • Bolstering transparency in trade by going beyond online publication of up-to-date information on trade rules and procedures to strengthening the capacity of State agencies, with a view to enabling them to prepare explanatory material on the implication of these rules and maintain continuous consultations with the private sector.
  • Transitioning to a paperless trading environment following a concerted effort to streamline, harmonise and standardize information requirements, in order to set the context of establishing an online system for a one-time submission to data elements following the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) recommendations and business standards.
  • Further reducing clearance time by, among others, synchronizing the working hours of control agencies, streamlining control procedures, further developing the risk management system and equipping border crossing points (BCPs) with the required facilities.
  • Consolidating the national system of quality infrastructure with additional resources for addressing capacity shortfalls in the areas of standardization, conformity assessment and metrology.
  • Bringing the enterprise sector, particularly MSMEs, up to regulatory requirements in domestic and global markets through targeted programmes that are geared towards developing their productive capacity.

By generating supply chain efficiencies and supporting enterprise development, the recommendations will help drive progress on multiple Sustainable Development Goals (SDGs): 1 (no poverty), 8 (decent work and economic growth), 9 (industry, innovation and infrastructure), 16 (peace, justice and strong institutions) and 17 (partnerships for the goals).

UNECE will be assisting the Government of Serbia in implementing the recommendations in collaboration with development partners, and working closely with the United Nations Resident Coordinator’s Office in Serbia. The findings and recommendations emerging from the studies will also be reflected in the UN Development Cooperation Framework, which seeks to support the country in addressing key SDG priorities and gaps.

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Note to editors

UNECE study on regulatory and procedural barriers to trade in Serbia was conducted upon the request of the Government of Serbia, using the UNECE survey-based evaluation methodology. The study was carried over the period 2019-2020 with funds from the United Nations Development Account.

Similar studies were carried out in Albania, Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, the Republic of Moldova and Tajikistan. The studies were conducted upon the requests of the Governments.

UNECE assessment of the impact of COVID-19 on trade and structural transformation in Serbia was conducted upon the request of the Government of Serbia, using the UNECE questionnaire that was adapted to the national context. In total, 726 agricultural and manufacturing enterprises from across the country participated in the survey, which was carried over the period May-October 2020 in collaboration with the Chamber of Commerce and Industry of Serbia.

UNECE carried out similar COVID-19 impact assessments in Armenia, Belarus, Georgia and the Republic of Moldova. The assessments were carried out in 2020 upon the request of the Governments with funds from the United Nations Development Account.

Countries: Serbia

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